For the past year, gold has been battling around the $1,800 an ounce psychological mark. Silver has faced a similar up and down battle near $25, albeit with more volatility.
Gold finished 2021 strong at $1830 but then a pullback happened followed by a quick rebound back above $1800 and now $1830. Will $1800 hold this time and provide support? Can silver break through $25 and unleash the bulls? Obviously, no one knows for sure, but taking a look at some indicators can provide some insight.
An article earlier this month reviewed the massive volume of physical metal leaving the bank House accounts over the last two years. December 2021 finished the year off with a massive drawdown in House account inventories. While the drawdown continues across most accounts, Bank of America has tried to recoup some of the physical metal that left its holdings in December. As the data below shows, this has led to an extremely strong January to kick-off 2022.
It is often said that perception is reality. Politicians spend a tremendous amount of time and energy trying to shape perceptions. So, how does the average American perceive the US economy? In this episode of the Friday Gold Wrap, host Mike Maharrey talks about economic perceptions – both those the politicians are trying to create and those actually held by American consumers.
Last month, we saw a small increase in metal stored in COMEX vaults, but that turned out to be a blip in the trend. Metal is leaving the COMEX vaults again.
This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.
Inflation is running hot. Economic data is running cold. Stocks and bonds are under pressure. The Fed is scrambling. In his podcast, Peter Schiff talked about the trajectory of the economy. He said we’re on the cusp of the most obvious crisis that virtually nobody saw coming. The Federal Reserve made this bed. Now we have to lie in it.
December gave us another big jump in consumer prices. But despite a lot of talk about an inflation war, accommodative monetary policy remains in play. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey breaks down the CPI data, Jerome Powell’s Senate testimony, and Joe Biden’s plan to fix rising meat prices. That story has a fun plot twist.
In the calendar year 2021, federal tax revenues surged by an incredible 25% compared to 2020 and were up 22.8% over 2019 (pre-COVID). But the surge in tax revenues was not enough to overcome a record $6.8 trillion in spending, breaking the spending record set in 2020 by 1.6%.
The CPI for December was 0.5% month over month, with a non-seasonally adjusted annual rate of 7.0%.
As the chart below shows, the December data reinforced a downward trend we’ve seen since a .95% reading in October. But is the recent omicron COVID spike hiding much higher inflation?
November had been the weakest jobs report of the year until a meager 199k were announced for December. As shown below, over the last 18 months, only December 2020 was weaker. This was right when the Covid second wave was wreaking havoc and before vaccines became available to the public.
The debt ceiling was raised in December and the Treasury responded immediately, adding $709 billion in debt over the month.
To be fair, $470 billion of this was non-marketable, as shown below.
Note: Non-Marketable consists almost entirely of debt the government owes to itself (e.g., debt owed to Social Security or public retirement)